Wyoming Incorporation Advantages

We Like the Personal Privacy and Asset Protection Advantages

What’s the buzz about Wyoming incorporation? Recent articles tout the state as America’s newest corporate haven. Wyoming offers substantial privacy to Corporation and LLC owners. Owners are not required to identify themselves in any public records. No Wyoming agency maintains owner information. This makes it very difficult for creditors, business competitors, data collection services, state tax authorities, the IRS, police, or other third parties to determine who a Wyoming entity’s owners are.

Protection from IRS and Other Government Agencies

Wyoming’s privacy protections shelter owners from the prying eyes of the IRS and other government agencies. This benefit is obvious, even to a completely law-abiding company or company owner. Our government, tax authorities, and courts, while the finest anywhere, are capable of occasionally pursuing the innocent.

No Income Tax and no US Internal Revenue Service Information Sharing Agreement (ISA).

Wyoming does not participate in the US Internal Revenue Service Information Sharing Agreement. The IRS reported in late 2003 that it has in place an Information Sharing Agreement (‘ISA’) with about 33 states. As reported by the IRS, states that participate in the ISA include Alabama, Arizona, Arkansas, Connecticut, Georgia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Missouri, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Washington, West Virginia and Wisconsin. Under the ISA, the IRS and participating states share information (and vice versa) on abusive tax avoidance transactions and those taxpayers who participate in them.

The purpose of the ISA is to combat abusive tax avoidance. Even if Wyoming participated in the agreement, it would have no information to share. Because Wyoming has no corporate income tax and no personal income tax, it has no corresponding tax forms and no corresponding tax department.

Wyoming Corporate Privacy Points

An owner of a Wyoming Corporation or Limited Liability Company enjoys unparalleled security and privacy due to the following:

Wyoming has no Information Sharing Agreement with the IRS.

Company ownership need not be disclosed to Wyoming authorities.

Wyoming does not maintain public records of Wyoming Corporation and Limited Liability Company ownership.

Reporting and Disclosure obligations are minimal.

The Wyoming Taxation Advantage: Low Taxes and No Tax Forms

Wyoming’s residents and businesses enjoy some of the lowest state taxes anywhere. In fact, the non-profit group The Tax Foundation voted Wyoming to have “the most business-friendly tax system of any state.” Wyoming does not impose a tax on either corporate profits or Limited Liability Company profits; many other states do, such as New York and California. California even imposes a 1.5% income tax on S Corporations (which do not pay income tax at the federal level) and a wallet-busting $800 minimum income tax on all Corporations and LLCs–regardless of the company’s profits or losses.

Similarly, Wyoming imposes no property tax on corporate stock or Limited Liability Company ownership shares. By comparison, New York imposes an annual filing fee on LLCs of between $325 and $10,000, depending on the number of LLC members.

Wyoming imposes no franchise tax. A franchise tax is a tax levied in consideration for the privilege of either incorporating or qualifying to do business in a state. A franchise tax may be based upon income, assets, outstanding shares, or a combination. Put another way, a franchise tax is a tax one pays for “just being there.” Nearly all states impose franchise taxes on businesses.

Taxes = Forms +Audits

Of course, any tax payment scheme requires a tax reporting and a tax enforcement scheme. States that impose income, franchise, and asset taxes all require annual tax forms to be prepared, and signed under oath by a corporate officer. Corporations and Limited Liability Companies are also subject to audits and inquiries from state tax authorities in states where these taxes are required. Because Wyoming imposes no taxes on business entities, Wyoming requires no tax forms and does not audit business entities chartered there.
The only fee of any kind that Wyoming levies against Limited Liability Companies and Corporations is a nominal annual fee of $50 (the fee graduates upwards slightly for very large Corporations).

Tax Points

Wyoming has one of the least burdensome business tax structures in the United States. Again, the key advantages are:

Wyoming imposes no income tax on either Corporations or Limited Liability Companies.

Wyoming imposes no franchise tax.

Wyoming imposes no tax on capital stock or assets.

Wyoming imposes only minimal annual fees of $50.

The Wyoming Flexibility and Convenience Advantage: Pro-Owner and Pro-Convenience Legal System

Wyoming’s legislature understands the needs of business owners and intentionally designed their corporate law to be pro-convenience and pro-owner. Wyoming offers a wealth of features that bring flexibility, convenience, and time savings to Corporation and Limited Liability Company management:

Wyoming is a “sole owner” state; Wyoming allows one individual to serve as the stockholder, director, president, secretary and treasurer. The sole owner rule applies to both Corporations and Limited Liability Companies. Some states require at least two officers and/or at least three directors. For a sole owner business, having multiple officers and directors may serve to drain time and resources. Wyoming’s sole owner rules ensure flexibility and efficiency.

Wyoming allows Corporations to charter with unlimited authorized shares. Corporations are normally bound by the number of authorized shares set forth in their articles of incorporation. If a Corporation exceeds the number of authorized shares designated in the articles, the Corporation must scramble to amend the articles to increase the number of authorized shares. Wyoming’s unlimited authorized shares option gives Corporations unlimited room for growth.

Wyoming is a “written consent” state; Wyoming gives owners and managers a wide degree flexibility to take corporate actions by written consent. A written consent is a binding, written resolution adopted by either the shareholders or directors of a corporation approving a particular corporate action. A written consent is a more convenient and less time-consuming alternative than the more burdensome method of calling, noticing, and conducting formal meetings of management and shareholders.

Wyoming Corporations (and Limited Liability Companies) may issue stock for nearly any sort of consideration: capital investment, services, personal property, or real estate, including leases and options. Not all states grant such power to a Corporation. This freedom allows Wyoming Corporations to issue shares for the services of employees and consultants. The Corporation’s directors may determine the value of any of these transactions, and their decision cannot be challenged. This rule is advantageous to organizers of companies–it gives them the power to adjust stock ownership as they see fit.

A Wyoming Corporation may purchase, own, hold, sell, transfer, pledge, or assign shares of its own stock. Not all states allow Corporations to own or transfer their own shares. This power brings valuable flexibility to the Wyoming business owner.

A Wyoming Corporation or Limited Liability Company can transfer stock instantly and privately, without any public notification or state filing. This is a further privacy protection that Wyoming Corporations, LLCs, and business owners enjoy.

Unlike some states, Wyoming does not impose a minimum capital investment requirement. As such, you need no minimum investment to form a Wyoming Limited Liability Company or Corporation. You can form a Wyoming Corporation or LLC with as little as $10 of capital–and no state authority will ever question the amount of initial investment made to the entity.

Wyoming has wisely organized the Secretary of State’s office into an efficient and effective customer service organization. The Secretary of State’s Web site is informative and easy to navigate. The searchable database allows one to quickly check on the status of one’s own Corporation or Limited Liability Company. Is one’s entity overdue in its annual report? Is one’s entity in good standing with the Secretary of State’s office? A simple check on the web will answer these questions. Annual reports can be done in seconds, right from your computer.

Directors and officers of Wyoming Corporations enjoy generous protection (sometimes called “indemnity”) from personal liability to the Corporation or to a Corporation’s shareholders in connection with their service to the Corporation.

A Wyoming Corporation or Limited Liability Company can be headquartered anywhere in the world. In fact, a Wyoming Corporation or Limited Liability Company is not required to maintain its records in Wyoming. Wyoming merely requires one Wyoming address: the address of your registered agent. Even non-U.S. citizens can form and own a Wyoming Corporation.

Your Wyoming Corporation can be operated from any where in the United States, or anywhere in the world, and your Wyoming Corporation or Limited Liability Company can own real or personal property anywhere in the world.